Oriental Insurance Company vs Deepak Goyal and Others

With the consent of parties, the petition is finally disposed of. This petition has been filed by the petitioner-Insurance Company against the settlement dated 26th February, 2011 entered between the parties before the Lok Adalat in Miscellaneous Appeal No. 311/2009.

The claimant-respondent No. 1 filed a claim u/s 163A of Motor Vehicles Act 1988 [hereinafter referred to as "the Act"]. The Claims Tribunal rejected the claim on the ground that the claimant failed to prove any permanent disability caused to him. Hence, his claim u/s 163A of the Act was not maintainable. Thereafter, the matter was compromised between the parties i.e. between the petitioner-Insurance Company and the respondent No. 1 before the Lok Adalat. The petitioner-Insurance Company had agreed to pay a compensation of Rs. 25,000/- to the claimant.

Section 163A of the Act provides special provisions in regard to payment of compensation on structured formula basis.

Section 163A of the Act reads as under:-

163-A. Special provisions as to payment of compensation on structured formula basis.-(1) Notwithstanding anything contained in this Act or in any other lad for the time being in force or instrument having the force of law, the owner of the motor vehicle or the authorized insurer shall be liable to pay in the case of death or permanent disablement due to accident arising out of the use of motor vehicle, compensation, as indicated in the Second Schedule, to the legal heirs or the victim, as the case may be.

From the aforesaid Section itself, it is clear that the provisions of Section are applicable in case of death or permanent disablement due to accident arising out of the use of motor vehicle.

In the present case, the finding recorded by the Claims Tribunal that no permanent disability was caused to the claimant on account of accident. In this circumstance, the matter could not be compromised before the Lok Adalat. The parties have committed an error in arriving at settlement.

Hon''ble the Supreme Court in the case of State of Punjab and Another Vs. Jalour Singh and Others, has held that a settlement arrived between the parties in Lok Adalat, could be challenged under Article 226 or 227 of the Constitution on very limited grounds.

In our opinion, the matter could not be settled because the claimant-respondent No. 1 failed to prove the fact that any permanent disability had been caused to him in the accident.

In this view of the matter, the settlement was not proper. The writ petition is hereby allowed. The impugned settlement dated 26-02-2011 (Annexure P-1) is hereby quashed. The parties are at liberty to take recourse in accordance with law. Miscellaneous Appeal No. 311/2009 is restored to its original number and the same be listed before appropriate Bench. Petition stands disposed of accordingly.